Technical Trading Exercise (Pavilion103 and tech/a) Discussion

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

I prefer this over a book because:
- Some books might but you rarely see the bad trades. At least with this online forum method, you can see Pav's/Tech's losing trades, why they lost, what they got wrong, what was over looked, how it could of been a winner if analyzed differently etc. Books will usually show you the perfect setup, unfortunately for us the perfect setup doesn't present itself everyday.
- By watching reading this, many who know little about technical analysis can at least learn a foundation. Then if they enjoy it, they can go buy those hundreds of books available on Amazon and read even more. If they hate it, no wasted money on books/fire-paper in the end.
- A book won't answer a spontaneous question if the need arises.
- Besides, wouldn't you rather support an ASF member, especially when it comes to teaching others?

I'm sure you could get an admin (perhaps from your control panel) you could block the thread so you can't see it, save's annoying those who wish to learn.

That's my two bobs anyway, bring on the charts and analysis!!

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Kalaika said:

Tech/a

With the trading style you've described, it sounds like you have a fairly strong risk management mechanism (i.e. moving stops to BE as soon as poss).

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Yes a cornerstone of the method I wanted Pav to get proficient in. there are methods of trading with NO STOP and no TRAILING stop---but for those starting the journey of technical trading this is NOT where to start in my view.

How do you model the expected performance of this approach across a wider universe of stocks (other than your system real time performance?), to know that its better than, say, giving a little xtra breathing space with original stops (perhaps even shifting half way from original to break even) and potentially getting more run out of them?

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This is an excellent and very important question Thanks for asking it.
Ive made the point time and again and will continue to make it---that most people trade on theory,a group of ideas stuck together in a "plan"--logic that has a sound theoretical basis for succeeding.
The market has a way of fooling the best laid plans with randomness.


To your question specifically
from 20 yrs of Technical analysis countless hrs of testing and countless hrs of trading it is crystal clear to me that.

(1) You can profit only if you have more wins with aggregate losses less than aggregate wins.
OR
(2) You have Much larger wins than aggregate losses.
OR
(3) A mix of both

There is one goal in this exercise and when I trade and it is centered around BOTH (3)
More in the Introduction to technical trading when I have a little more time.

.

More interested in your philosophy than anything else...

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Wise.

DJG said:

I prefer this over a book because:
- Some books might but you rarely see the bad trades. At least with this online forum method, you can see Pav's/Tech's losing trades,

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Yes you will.

why they lost,

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That too.

what they got wrong,

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In every case it will be that the analysis which indicated a potential development in price action would manifest itself---didn't

what was over looked, how it could of been a winner if analyzed differently

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That wont be happening--your free to debate it but for us the goal is--and will remain to achieve a profitable method.We/I am not interested in reflection--I know I/we will get it wrong,I expect that.
Its what you do when your wrong and as RADGE says "How long you stay wrong" that will effect your 3 principals of long term profit.

Books will usually show you the perfect setup, unfortunately for us the perfect setup doesn't present itself everyday.
- By watching reading this, many who know little about technical analysis can at least learn a foundation.

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My hope is that it may open an alternative to some who have never considered technical analysis.
Those who see it as Voodoo.Those who have seen complex demonstrations that fill a chart with more lines than a cardiograph.

I want to cut through the mumbo jumbo and show the simplicity of profitable technical trading.
For Pav at least I think I have achieved this.

Believe it or not the very same principals can and SHOULD be used by Fundamental traders.Even the introduction of a few principals would be most helpful---in my view.

Then if they enjoy it, they can go buy those hundreds of books available on Amazon and read even more. If they hate it, no wasted money on books/fire-paper in the end.
- A book won't answer a spontaneous question if the need arises.

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If they do I hope they understand which books are helpful and what in particular they should investigate.
Buying books without purpose and only curiosity is time wasting--join the two for results!
Better still start trading your sim!!

Finally this thread has been a great introduction --anticipatory questions have helped me formulate the presentation.
Thank you for all contributing and the obvious interest.

I will be opening 1 locked thread which Pav and I can open (through Joe)
Questions should be directed to this current thread.

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

tech/a said:

To your question specifically
from 20 yrs of Technical analysis countless hrs of testing and countless hrs of trading it is crystal clear to me that.

(1) You can profit only if you have more wins with aggregate losses less than aggregate wins.
OR
(2) You have Much larger wins than aggregate losses.
OR
(3) A mix of both

There is one goal in this exercise and when I trade and it is centered around BOTH (3)
More in the Introduction to technical trading when I have a little more time.

Click to expand...

Thanks for the perspective tech/a.

I've yet to start trading but have been working on my base knowledge for the past couple of months, and during this time have made plenty of scribblings around the elements i would factor into my system(s) when the time comes.

I have found myself placing more importance - for my personal style - on building a robust risk and money management mechanism (position sizing, initial stops, trailing stops, adjusting the later based on where the trade goes over time) ahead of getting the perfect setup.

What i'm hoping to develop from this mindset is a system which has an arbitrary (poor choice of words - say, "less relevant") percentage of winning trades, but a superior ratio of winning % to losing % - i think this is aligns to your point 2 above.

If i can develop something per the above with a satisfactory expectancy, and later improve the quality of setups themselves through experience and education, i should be able to increase expetency further.

All good in theory

The single hardest thing i've dealt with to date is having to stop myself from launching into "system build" mode without sufficiently having bringing my rambled notes into a more structured plan.

Dumb question but how do we see the locked thread when it gets setup?

Thanks again for info.

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Kalaika said:

Thanks for the perspective tech/a.

I have found myself placing more importance - for my personal style - on building a robust risk and money management mechanism (position sizing, initial stops, trailing stops, adjusting the later based on where the trade goes over time) ahead of getting the perfect setup.

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Wise.

What i'm hoping to develop from this mindset is a system which has an arbitrary (poor choice of words - say, "less relevant") percentage of winning trades, but a superior ratio of winning % to losing % - i think this is aligns to your point 2 above.

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Difficult to do unless you have a known result (read R/R) from an exit mechanism which is used over and over.
Suited best to Systems trading than discretionary.
Youll be for ever in turmoil as to when to hold and when to fold---particularly after you've closed a trade.

If i can develop something per the above with a satisfactory expectancy, and later improve the quality of setups themselves through experience and education, i should be able to increase expetency further.

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The best way to incease expectancy is to LOSE LESS both at the initial stop end and the exit end of trades.
Rather than looking at expectancy of every single trade--think of it as an on going challenge of increasing reward while decreasing Risk.
Youll see in our model that the initial Risk isn't reflected in the overall risk average---its less!

All good in theory

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Where we all must start.

The single hardest thing i've dealt with to date is having to stop myself from launching into "system build" mode without sufficiently having bringing my rambled notes into a more structured plan.

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no no launch into it---You'll learn more here than in theory.

Dumb question but how do we see the locked thread when it gets setup?

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You'll be able to see it you just wont be able to post on it.
Keeps it from becoming disjointed.

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

tech/a said:

from 20 yrs of Technical analysis countless hrs of testing and countless hrs of trading it is crystal clear to me that.

(1) You can profit only if you have more wins with aggregate losses less than aggregate wins.
OR
(2) You have Much larger wins than aggregate losses.
OR
(3) A mix of both

Click to expand...

Kalaika said:

What i'm hoping to develop from this mindset is a system which has an arbitrary (poor choice of words - say, "less relevant") percentage of winning trades, but a superior ratio of winning % to losing % - i think this is aligns to your point 2 above.

Click to expand...

For anyone who is confused by the Wins vs Losses element of this discussion then this extract from a TradeSim backtest of my weekly breakout system will hopefully demonstrate that the number (%) of losses can far exceed the number (%) of wins and still be profitable.
The way I think of it is that the number of losses are a reflection of the number of times the capital protection mechanism has been activated.
Chart example here https://www.aussiestockforums.com/f...t=9392&page=10&p=773175&viewfull=1#post773175

(click to expand)

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Wow, great example Boggo....that would be hard to trade for me. I'm a little partial to 40-50%, but if it was a part of a portfolio of systems it might be a ok.

Nice Win loss ratio

CanOz

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

I'll have what Boggo's having!!

Although I'm not sure I'd have the pills to stick with a 20-ish % win rate, irrespective of back testing. Bravo!

Boggo, does the "minimum equity" being a negative number mean your max drawdown took you beyond your equity limit?

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Kalaika said:

Boggo, does the "minimum equity" being a negative number mean your max drawdown took you beyond your equity limit?

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Its the dip below the starting capital and the maximum was the highest above the same.

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

tech/a said:

Those who have seen complex demonstrations that fill a chart with more lines than a cardiograph.

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I view simple price action/VSA the best, less lines, crap and histograms and what not cludding the space! I'm sure majority are the same

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Hi tech/a & Pav,

Count me in please, I'm keen to have the opportunity to listen and learn.

Thanks.

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Boggo said:

For anyone who is confused by the Wins vs Losses element of this discussion then this extract from a TradeSim backtest of my weekly breakout system will hopefully demonstrate that the number (%) of losses can far exceed the number (%) of wins and still be profitable.
The way I think of it is that the number of losses are a reflection of the number of times the capital protection mechanism has been activated.

(click to expand)

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The largest single winning trade accounted for 1/3 of the profit over 10 years. Can you look up what that trade is out of curiosity?

Even if you exclude that largest win, the stats are still very respectable.

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

skc said:

The largest single winning trade accounted for 1/3 of the profit over 10 years. Can you look up what that trade is out of curiosity?

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Will do, at the airport about to catch a flight so may be late tomorrow before I get back to the computer with the info.

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Never too old or experienced to learn from others. I'm in.
Thanks for your offer gents.

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

I would be very interested in learning from tech and Pav.
Looking forward to tech's detailed posts laying the background and methodology of this type of trading.
In the meantime, Pav, would appreciate if you could post the results of your trading so far, in terms of total trades, win/loss ratio etc, etc.

Cheers

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Count me in Tech. Thanks for your generosity.

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

skc said:

The largest single winning trade accounted for 1/3 of the profit over 10 years. Can you look up what that trade is out of curiosity?

Even if you exclude that largest win, the stats are still very respectable.

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AMX, probably wouldn't have taken the trade sub 10c though had I been running this system then.

Back on topic now to the tech/a - Pav exercise

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Boggo said:

AMX, probably wouldn't have taken the trade sub 10c though had I been running this system then.

Back on topic now to the tech/a - Pav exercise

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Sad lack of suitable trade setups on scans since Friday
To kick things off then I'll run through some past charts
Failure/success/pyramid and Breakeven to give some idea of method and management over this week

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Boggo said:

AMX, probably wouldn't have taken the trade sub 10c though had I been running this system then.

Back on topic now to the tech/a - Pav exercise

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Well you'd hit one of these when you trade for enough years...

And thanks for the PM. Tried to reply but your inbox is full.

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

Great start to the thread, looking forward to what is to come.

Will there be hints and tips on the scans as well?

Re: Technical Trading Exercise---Discretionary, (Pavilion103 & tech/a)

fiftyeight said:

Great start to the thread, looking forward to what is to come.

Will there be hints and tips on the scans as well?

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Yes

My apologies for delays as time is at a premium.